If the Bank Returns $1,060 on the $1,000 Deposited for a Year

question 257

Multiple Choice

If the bank returns $1,060 on the $1,000 deposited for a year during which inflation was 4 percent,the real interest rate is

• A)6 percent.
• B)10 percent.
• C)-2 percent.
• D)2 percent.
• E)16 percent.

---

Definitions:

Subduction-Derived Magma

Magma that is generated in subduction zones when one tectonic plate moves under another, melting due to high pressure and temperature.

Continental Crust

The layer of igneous, sedimentary, and metamorphic rocks that forms the continents and the areas of shallow seabed close to their shores.

Felsic Composition

Rocks rich in silica and aluminum, characterized by lighter minerals like quartz and feldspar.

Decompression

The reduction in pressure exerted on a material, often leading to changes in its physical state or phase.